by betsharks0
In this case, the interest rates on 10-year bonds higher than s&p
It could suggest that people are becoming less worried about the immediate future compared to the long-term outlook.
IN RECESSION Scenario:
If the yield curve is normalizing during a recession, might be due to the belief that the worst of the economic downturn has passed, or there’s optimism for a recovery in the long term.
The steepness of the yield curve should be an excellent indicator of a possible future recession for several reasons. Current monetary policy has a significant influence on the yield curve spread and hence on real activity over the next several quarters. A rise in the short rate tends to flatten the yield curve as well as to slow real growth in the near term . Actual 10yr 3 M spreads “Measure” a 60 % Probability of recession ..